Iron ore spot prices unchanged and deals slow

Tuesday, 27 Dec 2011

Reuters reported that spot iron ore prices are expected to remain flat or dip this week after last week gains as steel mills end a brief restocking period.

Iron ore suppliers have also suspended offers during the Christmas holiday season, with steel mills in top buyer China still worried about the state of the market in the New Year.

An iron ore trader in the eastern coastal province of Shandong said "I see mounting pressures on iron ore prices as spot billet prices continue to fall in Hebei because of rapidly shrinking demand, and we have received fewer offers due to the Christmas holiday."

Chinese steel mills boosted stockpiles of the raw material in the week before Christmas, picking up bargains as prices fell to around USD 130 per tonne.

Chinese consultancy Umetal said Pilbara fines with 61.5% iron content were being offered at USD 135 per tonne to USD 138 per tonne on Monday including cost and freight unchanged for the third consecutive day.

Metal Bulletin Iron Ore Index said in a Friday note that "We expect to hear fewer deals next week due to the Christmas holiday period."

It said "Prior to the Chinese new year holiday during the last week of January we expect to see rises as mills look to cover production during this time. This expectation is likely to provide upward pressure over the next few weeks as mills see the stability in the spot price as a good chance to buy material."

(Sourced from Reuters)